Opinion
Index No. 150017/2023
04-27-2023
Imperial Building & Restoration Inc., Plaintiff, v. Cindy Lin-Abcede and MARTIN ABCEDE, Defendant.
Attorney for Plaintiff: Nicholas M. Moccia, Esq. Law Office of Nicholas M. Moccia P.C. Attorney for Defendant: Rebecca A. Valk, Esq. Rebecca A. Valk, PLLC
Unpublished Opinion
Attorney for Plaintiff: Nicholas M. Moccia, Esq. Law Office of Nicholas M. Moccia P.C.
Attorney for Defendant: Rebecca A. Valk, Esq. Rebecca A. Valk, PLLC
Ronald Castorina, Jr., J.
The following e-filed documents listed on NYSCEF (Motion #001) numbered 5-31 were read on this motion.
Upon the foregoing documents, and after oral argument conducted on March 30, 2023, Motion Sequence #001 is resolved as follows, it is hereby:
ORDERED, that the Defendant's motion pursuant to CPLR § 3211 [a] [7] for dismissal of the Plaintiff's third cause of action in the amended verified complaint is GRANTED, with prejudice and without leave to replead, and it is further;
ORDERED, that the Defendant's motion for sanctions consisting of damages due to the delay in closing the sale of 223 Gordon Street, Staten Island, costs, and attorney's fees, pursuant to 22 NYCRR 130-1.1 against both Plaintiff and its counsel is DENIED, with prejudice, and it is further;
ORDERED, that the Clerk of the Court shall enter judgment accordingly.
Memorandum Decision
I. Procedural History
Plaintiff commenced the instant action against Defendants ABCEDE for breach of contract and for Quantum Meruit for goods and services supplied, against Defendant Yoder Pursuant to General Obligations Law § 11-104, and for an equitable lien against 233 Gordon Street, Staten Island, New York.
Defendants Cindy Lin-Abcede, Martin Abcede, and Robert Yoder, a non-party, filed Motion Sequence #001 on January 26, 2023, seeking (a) to dismiss the cause of action pursuant to Civil Practice Law and Rules (CPLR) § 3211 [a] [7] asserting an equitable lien for failure to state a cause of action and, upon dismissal, vacate the Notice of Pendency filed against the property at 233 Gordon Street, Staten Island, New York, and (b) sanctions, after an inquest consisting of damages due to the delay in closing the sale of the aforementioned property, costs and attorney fees pursuant to 22 NYCRR § 130-1.1 against both Plaintiff and counsel. Plaintiff filed opposition in Cross Motion Sequence #002 on February 28, 2023. Defendant filed reply on March 9, 2023. Oral argument was heard on March 30, 2023
On April 6, 2023, on consent of the parties, Cross Motion #002 was granted in its entirety by short form Order. (NY St Cts Filing [NYSCEF] Doc No. 30). Motion Sequence #002 granted Plaintiff leave to amend its complaint, discontinued the action without prejudice against Defendant Robert Yoder, and amended the caption to remove Defendant Yoder. Parties also agreed that "[i]n the interest of judicial economy, Defendants' motion to dismiss Plaintiff's cause of action for the imposition of an equitable lien [Motion Sequence #001] shall be deemed to pertain to Plaintiff's third cause of action in the Plaintiff's proposed amended complaint [see NY St Cts Filing [NYSCEF] Doc No. 31] for the imposition of an equitable lien." (NY St Cts Filing [NYSCEF] Doc No. 30).
II. Facts
On or about October 17, 2019, Defendants, Cindy Lin-Abcede and Martin Abcede, entered into a home improvement contract with Plaintiff to perform certain improvements on residential property located at 223 Gordon Street, Staten Island, New York (NY St Cts Filing [NYSCEF] Doc No. 26). Disagreements arose between the parties and Plaintiff's services were terminated. Plaintiff alleges the renovations set forth in the contract were fully performed, but Defendants were unable to tender the full contract price and had an unpaid balance of $34,980.00. Plaintiff further contends that on or about November 10, 2019, the Defendants changed the locks on the premises and Plaintiff was unable to retrieve tools, valued at $2,882.00.
Plaintiff filed a Mechanic's lien on May 12, 2021 (NY St Cts Filing [NYSCEF] Doc No. 8). Plaintiff failed to either foreclose on the mechanic's lien or seek to have it extended as required by the Lien Law. The mechanic's lien was discharged by Order of this Court dated January 4, 2023 (NY St Cts Filing [NYSCEF] Doc No. 8). Defendants allege that immediately following the discharge of the mechanic's lien, Plaintiff's counsel transmitted the Summons and Complaint with Notice of Pendency in this action and an offer to engage in settlement negotiations. (NY St Cts Filing [NYSCEF] Doc No. 10).
Defendants purport that since Plaintiff had no defense to the dismissal of the mechanic's lien, Plaintiff now attempts to maintain a cause of action for an equitable lien. Defendant contends the cause of action for an equitable lien should be dismissed and Plaintiff and counsel should be sanctioned for maintaining the frivolous cause of action for an equitable lien simply to delay the sale of the 223 Gordon Street, Staten Island, New York, after the same was brought to their attention and after sufficient time has been provided to research the issue.
III. Sufficiency Claim for Equitable Lien
Plaintiff's Third Cause of Action for an Equitable Lien Against 233 Gordon Street, Staten Island, New York contends
26. Plaintiff fully performed renovations to the Subject Premises from the ABCEDE Defendants pursuant to an express or implied contract concerning the Subject Premises wherein there was a clear intent between the Plaintiff and the ABCEDE Defendants that such property be held, given or transferred as security for the satisfaction of the ABCEDE Defendants' obligation to the Plaintiff in the sum of $34,980.00.
27. Upon information and belief, the ABCEDE Defendants have listed the Subject Premises for sale, and stand to profit at the Plaintiff's expense due to Plaintiff's uncompensated improvement of the Subject Premises.
28. The ABCEDE Defendants have repudiated their obligation to satisfy their obligation to the Plaintiff from the proceeds of the sale of the Subject Premises.
29. The Plaintiff has no adequate remedy at law.
30. Accordingly, Plaintiff is entitled to the imposition of an equitable lien on the Subject Premises for a sum not less than $34,980.00. (NY St Cts Filing [NYSCEF] Doc No. 31).
Parties apparently entered a contract for Plaintiff to complete home renovations to the Defendants' subject premises as described in the itemized statement provided. (NY St Cts Filing [NYSCEF] Doc No. 26). Plaintiff alleges that on or about October 17, 2019, the Defendants entered into a contract with the Plaintiff for home improvements in the subject premises. (NY St Cts Filing [NYSCEF] Doc No. 31). Plaintiff contends that the Defendants breached this contract, by failing to pay Plaintiff for the work Plaintiff performed and the materials Plaintiff supplied under the terms of the contract and consequently, the Plaintiff has been damaged in a sum that is not less than $34,980.00 plus interest from November 5, 2019. (see id). Plaintiff also maintains that the reasonable value of the goods and services the Plaintiff supplied to the Defendants for the improvement of the subject is valued at $34,980.00 and if the contract is found to be unenforceable, the Defendants will be unjustly enriched at the Plaintiff's expense. (see id).
CPLR 3211 [a] [7] provides that a "party may move for judgment dismissing one or more causes of action asserted against him on the ground that the pleading fails to state a cause of action[.]" "In considering a motion pursuant to CPLR 3211 [a] [7] to dismiss a complaint for failure to state a cause of action, the court must accept the facts as alleged in the complaint as true, accord the plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (see Green 333 Corp. v RNL Life Science, Inc., 186 A.D.3d 1334 [2d Dept 2020] citing Cortlandt St. Recovery Corp. v Bonderman, 31 N.Y.3d 30 [2018]; Korsinsky v Rose, 120 A.D.3d 1307 [2d Dept 2014]).
"On a motion to dismiss for failure to state a cause of action, 'the pleading is to be afforded a liberal construction'" (see Nassau Operating Co., LLC v DeSimone, 206 A.D.3d 920 [2d Dept 2022] quoting Leon v Martinez, 84 N.Y.2d 83 [1994] citing CPLR § 3026 ). "The facts alleged in the complaint must be accepted as true, and the plaintiff is entitled to receive the benefit 'of every possible favorable inference'" (see id quoting Leon v Martinez, 84 N.Y.2d 83 [1994]). However, "[d]ismissal of the complaint is warranted if the plaintiff fails to assert facts in support of an element of the claim" (see id quoting Connaughton v Chipotle Mexican Grill, Inc., 29 N.Y.3d 137 [2017] citing Myers v Schneiderman, 30 N.Y.3d 1 [2017]).
"New York law does not allow the imposition of an equitable lien unless there is an express or implied agreement that there shall be a lien on the specific property at issue" (see Matter of Saadia Safdi Realty, LLC v. Press, 207 A.D.3d 633 [2d Dept 2022] citing M & B Joint Venture, Inc. v. Laurus Master Fund, Ltd., 12 N.Y.3d 798 [2009]; U.S. Bank N.A. v Saff, 191 A.D.3d 733 [2d Dept 2021]). "While [a] court will impose an equitable mortgage where the facts surrounding a transaction evidence that the parties intended that a specific piece of property is to be held or transferred to secure an obligation, it is necessary that an intention to create such a charge clearly appear from the language and the attendant circumstances" (see Deutsche Bank Trust Co. Ams. v. Cox, 110 A.D.3d 760 [2d Dept 2013] quoting Tornatore v. Bruno, 12 A.D.3d 1115 [4th Dept 2004]; citing Pennsylvania Oil Products Refining Co. v. Willrock Producing Co., 267 NY 427 [1935]; J.P. Morgan Chase Bank, N.A. v Cortes, 96 A.D.3d 803 [2d Dept 2012]; Fremont Inv. & Loan v Delsol, 65 A.D.3d 1013 [2d Dept 2009]).
"Such an agreement must evince a sufficiently clear intent that the property is to be 'held, given or transferred as security for the obligation'" (see M & B Joint Venture, Inc. v. Laurus Master Fund, Ltd., 12 N.Y.3d 798 [2009] quoting Teichman by Teichman v. Community Hosp., 87 N.Y.2d 514 [1996]). "A party's 'mere expectation, however sincere, is insufficient to establish an equitable lien'" (see M & B Joint Venture, Inc. v. Laurus Master Fund, Ltd., 12 N.Y.3d 798 [2009] quoting Scivoletti v. Marsala, 61 N.Y.2d 806 [1984]).
"The theory of equitable liens has its ultimate foundation in contracts express or implied which either deal with or in some manner relate to specific property, such as a tract of land, particular chattels or security, a certain fund and the like. The agreement must deal with some particular property either by identifying it or by so describing it that it can be identified and must indicate with sufficient clearness an intent that the property so described or rendered capable of identification is to be held, given or transferred as security for the obligation." (see James v. Alderton Dock Yards, Ltd., 256 NY 298 [1931]).
A plaintiff asserting a cause of action for an equitable lien must plead facts suggesting that such an agreement existed. The alleged contract between the parties merely lists work to be performed with no reference to the property serving as security for payment. (NY St Cts Filing [NYSCEF] Doc No. 26). The Complaint alleges that "Plaintiff fully performed renovations to the Subject Premises from the ABCEDE Defendants pursuant to an express or implied contract concerning the Subject Premises wherein there was a clear intent between the Plaintiff and the ABCEDE Defendants that such property be held, given or transferred as security for the satisfaction of the ABCEDE Defendants' obligation to the Plaintiff in the sum of $34,980.00", however, a mere alleged and undocumented promise by the Defendants to "pay the balance they owed the Plaintiff from the proceeds of the sale of the [s]ubject [p]remises" is insufficient to show a clear agreement that there shall be a lien and that the property would be used as security. (NY St Cts Filing [NYSCEF] Doc No. 31)
An alleged promise to pay the balance owed from the sale proceeds, would be a mere
promise to pay a debt from a designated fund and does not operate to create an equitable lien. "It is equally well settled that an agreement, either by parol or in writing, to pay a debt out of a designated fund does not operate to create an equitable lien upon the fund, or operate as an equitable assignment thereof" (see Datlof v. Turetsky, 111 A.D.2d 364 [2d Dept 1985] citing James v. Alderton Dock Yards, Ltd., 256 NY 298 [1931]; In re Acquiring Title, 257 AD 267 [1st Dept 1939]).
Plaintiff's mere expectation that it might someday be paid from a potential transfer of 223 Gordon St., Staten Island, New York, which is all that has been pled here, is insufficient to establish an equitable lien. There are insufficient facts to imply an equitable lien on the subject property.
Accordingly, the Defendant's motion pursuant to CPLR § 3211 [a] [7] for an order dismissing the Plaintiff's third cause of action in the amended verified complaint is GRANTED, with prejudice and without leave to replead.
IV. Sanctions, Costs, and Attorney Fees
22 NYCRR § 130-1.1 provides as follows:
(a) The court, in its discretion, may award to any party or attorney in any civil action or proceeding before the court, except where prohibited by law, costs in the form of reimbursement for actual expenses reasonably incurred and reasonable attorney's fees, resulting from frivolous conduct as defined in this Part. In addition to or in lieu of awarding costs, the court, in its discretion may impose financial sanctions upon any party or attorney in a civil action or proceeding who engages in frivolous conduct as defined in this Part, which shall be payable as provided in section 130-1.3 of this Part. This Part shall not apply to town or village courts, to proceedings in a small claims part of any court, or to proceedings in the Family Court commenced under article 3, 7 or 8 of the Family Court Act.
(b) The court, as appropriate, may make such award of costs or impose such financial sanctions against either an attorney or a party to the litigation or against both. Where the award or sanction is against an attorney, it may be against the attorney personally or upon a partnership, firm, corporation, government agency, prosecutor's office, legal aid society or public defender's office with which the attorney is associated and that has appeared as attorney of record. The award or sanctions may be imposed upon any attorney appearing in the action or upon a partnership, firm or corporation with which the attorney is associated.
(c) For purposes of this Part, conduct is frivolous if:
(1) it is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law;
(2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or
(3) it asserts material factual statements that are false.
Frivolous conduct shall include the making of a frivolous motion for costs or sanctions under this section. In determining whether the conduct undertaken was frivolous, the court shall consider, among other issues the circumstances under which the conduct took place, including the time available for investigating the legal or factual basis of the conduct, and whether or not the conduct was continued when its lack of legal or factual basis was apparent, or should have been apparent, or was brought to the attention of counsel or the party.
(d) An award of costs or the imposition of sanctions may be made either upon motion in compliance with CPLR 2214 or 2215 or upon the court's own initiative, after a reasonable opportunity to be heard. The form of the hearing shall depend upon the nature of the conduct and the circumstances of the case.
Defendants seek an award of sanctions "consisting of damages due to the delay in closing the sale of 223 Gordon Street, Staten Island, costs and attorney's fees, pursuant to 22 NYCRR 130-1.1 against both Plaintiff and its counsel as a result of filing and maintaining a frivolous claim." (NY St Cts Filing [NYSCEF] Doc No. 5).
In Tropeano, an attorney, filed a notice of pendency against the marital residence of the parties in an underlying divorce action after bringing an action to recover legal fees against her client. (see Tropeano v. Tropeano 35 A.D.3d 444 [2d Dept 2006]). The Supreme Court found that this conduct was frivolous within the meaning of 22 NYCRR 130-1.1 [c] [1] (see id). However, in Tropeano v. Tropeano, the lower court awarded sanctions after trial, not on a motion to dismiss pursuant to CPLR § 3211 [a] [7] to dismiss one cause of action in a complaint consisting of four causes of action.
"A court may award a party 'costs in the form of reimbursement for actual expenses reasonably incurred and reasonable attorney's fees, resulting from frivolous conduct' ( 22 NYCRR 130-1.1 [a]). 'In addition to or in lieu of awarding costs, the court, in its discretion may impose financial sanctions upon any party or attorney in a civil action or proceeding who engages in frivolous conduct' (see Strunk v New York State Bd. of Elections, 126 A.D.3d 779 [2d Dept 2015] citing 22 NYCRR 130-1.1 [a]; Weissman v. Weissman, 116 A.D.3d 848 [2d Dept 2014]). "The decision whether to impose costs or sanctions against a party for frivolous conduct, and the amount of any such costs or sanctions, is generally entrusted to the court's sound discretion (see id citing Matter of Khan-Soleil v. Rashad, 111 A.D.3d 727 [2d Dept 2013]).
"Frivolous conduct, as defined under 22 NYCRR 130-1.1(c), is conduct which 'is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law;... is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or... asserts material factual statements that are false.' 'The decision of whether to award sanctions and the amount or nature of those sanctions is generally entrusted to the trial court's sound discretion'" (see Chicas v. Cassar, 212 A.D.3d 704 [2d Dept 2023] quoting Yinuo Yin v. Xiao Feng Qiao, 203 A.D.3d 996 [2d Dept 2022]).
Defendant has not demonstrated that Plaintiff's commencement of this action was frivolous or that counsel's arguments were without reasonable basis in law within the meaning of 22 NYCRR 130-1.1. Defendant's motion for sanctions consisting of damages due to the delay in closing the sale of 223 Gordon Street, Staten Island, costs, and attorney's fees, pursuant to 22 NYCRR 130-1.1 against both Plaintiff and its counsel is DENIED, with prejudice.
Decretal Paragraphs
It is hereby ORDERED that the Defendant's motion pursuant to CPLR § 3211 [a] [7] for dismissal of the Plaintiff's third cause of action in the amended verified complaint is GRANTED, with prejudice and without leave to replead, and it is further;
ORDERED, that the Defendant's motion for sanctions consisting of damages due to the delay in closing the sale of 223 Gordon Street, Staten Island, costs, and attorney's fees, pursuant to 22 NYCRR 130-1.1 against both Plaintiff and its counsel is DENIED, with prejudice, and it is further;
ORDERED, that the Clerk of the Court shall enter judgment accordingly.
The foregoing shall constitute the Decision and Order of this Court.